Mortgages Blog

Finance Blogs » Mortgages Blog » Spring housing thaw?

Spring housing thaw?

By Judy Martel ·
Wednesday, March 19, 2014
Posted: 12 pm ET

Heading into spring, homebuilders hope for a thaw in the housing market that has hampered sales and building activity. The National Association of Home Builders/Wells Fargo Housing Market Index moved up just a smidge, by one point, in March, reflecting a wait-and-see attitude.

mortgage-default-lg"A number of factors are raising builder concerns over meeting demand for the spring buying season," David Crowe, chief economist of the association, noted in a statement. "These include a shortage of buildable lots and skilled workers, rising materials prices and an extremely low inventory of new homes for sale."

Not so confident

The index measures builder confidence every month in three areas: current single home sales, buyer traffic and sales expectations over the next six months. The current index for all three stands at 47. A score below 50 means more builders view conditions as poor.

Of the three components, buyer traffic remained the lowest in March, increasing over February by two points to reach 33. Current sales conditions increased one point to 52, and sales expectations over the next six months dropped one point to 53.

Northeast has huge drop in starts

The Commerce Department reports that housing starts slipped by 0.2 percent in February, the third straight monthly decline. The Northeast was especially hard-hit, with a decline of 37.5 percent, though economists chalk much of that up to the severe winter weather.

Despite the declines, there is a bright note heading into spring: Permits to build homes increased 7.7 percent.

Foreclosure filings decline

In another bit of hopeful news, foreclosure filings are continuing to decline in most of the country. RealtyTrac reports that filings dropped 27 percent in February from a year earlier and 10 percent from January to the lowest level in more than seven years.

While new foreclosure activity is no longer the biggest threat to the housing market, there's the issue of so-called "zombie" foreclosures, or homes that owners have vacated that are still on the market, according to Daren Blomquist, vice president at RealtyTrac.

"The biggest threat from foreclosures going forward is properties that have been lingering in the foreclosure process for years, many of them vacant with neither the distressed homeowner or the foreclosing lender taking responsibility for maintenance and upkeep of the home -- or at the very least facilitating a sale to a new homeowner more likely to perform needed upkeep and maintenance," he said in a release.

States with the most owner-vacated homes include Florida, Illinois, New Jersey and Ohio.

Keep up with your wealth and mortgages and follow me on Twitter: @JudyMartel.

Get real-time rate quotes with Bankrate's Mortgage app.

Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.